China sold €4 billion ($4.6 billion) of euro-denominated bonds, drawing record demand in the latest sign of growing investor appetite for the country’s debt sales, reports Bloomberg. The offering, split equally in two parts, was last heard more than 26 times covered, with bids exceeding €104.5 billion, according to a person familiar with the matter. That’s the highest demand for a euro-denominated offering by China, according to other unidentified people familiar with the situation.
The shorter, four-year maturity tranche priced at five basis points above the mid-swap rate, after initial price talk at around 28 basis points over, while the longer seven-year tranche ended at 13 basis points above the mid-swap rate after initial talk at about 38 basis points over, according to the person.
The euro deal closely follows China’s successful $4 billion dual-tranche dollar-denominated bond sale on Nov. 5, which drew orders of almost 30 times its deal size. The robust demand helped the country price the shorter-tenor notes in that offering in line with Treasuries, despite the US having a stronger credit rating and a much bigger role in the global financial system.